'The Canadian manufacturing sector, particularly the automotive and aerospace industries, has been under increasing strain,' Governor General Michaelle Jean said in the speech.

'Our government will provide further support for these industries.' Pressure has been mounting on Canada's government to help bail out the struggling US Big Three automakers that have operations in Ontario province, as Washington considers a major rescue.

On Wednesday, Industry Minister Tony Clement met with executives of Ford, Chrysler and General Motors in Detroit.

The following day, Mr Clement was to discuss the Big Three's hopes for help with officials in Washington, to 'gather information on options being considered by the US government to assist the automotive sector'. General Motors, Chrysler and Ford employ 40,000 Canadians at its assembly plants in Ontario, and are responsible for an estimated 300,000 direct and indirect jobs in the country, including parts suppliers.

Last year, Ontario automakers built some 2.5 million vehicles in Canada, more than any US state, including Michigan.

And the Big Three's failure, according to the head of the Canadian Auto Workers' union, would be a 'devastating blow' to the Canadian economy, to consumers and to its members.

Mr Clement suggested Washington and Ottawa could partner on a joint North American strategy to help the Big Three avoid insolvency.

But he also reminded journalists that Prime Minister Stephen Harper, Ontario Premier Dalton McGuinty and US president-elect Barack Obama said 'this isn't about getting a shovelful of money and tossing it out the window and hoping it has some impact.

'It isn't about short-term bailouts. It's about what is the long-term strategy for the North American car industry.' 'We can make a quick decision and it might be the wrong decision,' he added. 'Making the right decision ... is in the best interests of taxpayers as well as our economy.' Ontario Minister of Economic Development Michael Bryant, who joined Mr Clement on the US trip, underscored the need for swift action.

'Canada ought to be moving prior to any US package ... to avoid being a minority shareholder in setting the terms and also to ensure that we are not locked into a proportion that is unrealistic for Canada,' he said.

On Tuesday, the Big Three pleaded with the US Congress for a US$25 billion (S$38 billion) dollar rescue package, to guarantee their survival amid slowing sales and a global financial crisis.

Their Canadian units are also asking Ottawa and Ontario for financial help 'proportional' to the size of a US government bailout, said Mr David Paterson, vice-president of General Motors of Canada.

Based on the requested US rescue package, and the fact Canada produces 14 per cent of all vehicles made in North America, Canadian government aid would amount to US$3.5 billion.

'The trick will be to provide the right help to keep these critical companies afloat without getting stuck in a corporate welfare quagmire,' commented the daily Globe and Mail in an editorial under the headline 'Time to feed the dinosaurs'.

Mr Obama has signalled he is willing to help the Detroit automakers, but also 'clearly stated he wants government aid to be linked to repatriating jobs from other countries,' the editorial said. 'These are worrisome words for Ontario.' In exchange for US aid, foreign assembly plants would thus be closed ahead of US operations in a likely restructuring, said Mr Christian Navarre, an auto industry specialist at the University of Ottawa.

Without Canadian aid, plant closures in Ontario are a real possibility, he told AFP, since 90 per cent of vehicles assembled in Canada and 65 per cent of Canadian-made automotive parts are exported to the United States.

Canadian exports of Ford, Chrysler and GM vehicles and parts peaked at C$51.0 billion (US$41.4 billion) in 1999, before falling by almost one-third since then.

The auto industry as a whole now accounts for about three per cent of Canada's gross domestic product, said Mr Jim Stanford, CAW chief economist.

Whatever the outcome of bailout talks, closing Canadian assembly plants would be bad for business, Mr Navarre said, noting that GM plants in Ontario, for example, are more productive than their US counterparts. -- AFP